Microsoft to Fork Over $8.5 Billion for Skype Acquisition

If you were Microsoft, how would you spend $8.5 billion to acquire another company? Apparently, the house that Gates built figures a VoIP outfit like Skype makes sense, as the two companies announced the acquisition on Tuesday morning.

Skype has announced that they will be acquired by Microsoft for $8.5 billion in cash, with an agreement approved by the board of directors from both companies. Skype has been through two owners in the last few years after being acquired by eBay in 2005 and then by investment group Silver Lake less than two years ago. Could the third time be the charm?

"Skype is a phenomenal service that is loved by millions of people around the world," Microsoft CEO Steve Ballmer said in a joint press release. "Together we will create the future of real-time communications so people can easily stay connected to family, friends, clients and colleagues anywhere in the world."

"Microsoft and Skype share the vision of bringing software innovation and products to our customers," explained Skype CEO Tony Bates. "Together, we will be able to accelerate Skype's plans to extend our global community and introduce new ways for everyone to communicate and collaborate.”

Bates will come along for the ride as president of the new Microsoft Skype Division, reporting directly to Ballmer as part of a new business division. The new unit’s immediate plans include support for Microsoft’s Xbox and Kinect as well as Windows Phone and other Windows services, including Lync, Outlook and Xbox Live. Microsoft has stated they “will continue to invest in and support Skype clients on non-Microsoft platforms” as well.

Skype has had a wild ride since being founded in 2003, and has taken a considerable amount of heat in recent months for its latest Mac client. Despite bringing parity with the Windows version, the user interface and design has been widely panned by users, with the company promising to address the issues over time.

Comments

I was a loyal paid customer of Skype for years, effective immediately, I am pulling my account(s) from Skype and erasing all my information from it! I will NOT be using Skype from now on, since the DEVIL now has control of it!!!

Google voice would be a viable option for voice calls, unfortunately, it doesn't do video, which is what I need and it MUST be able to do ALL calls/texts securely so now I'm on the look out for what will work on my iPad 2 as well as my family/friends windows devices as well as other Apple products. May be looking at VoxOx but it was a pain in the arse to get everyone to switch from Yahell to Skype, now to get them to switch to something else is going to be an even bigger pain!!!

Geoduck: I'd try Google Voice. Although MS has the ability to make Skype better; I don't know that they have the will. They've owned properties like PowerPoint for years; and once you've used Keynote, you can see how they've never really "fixed" PPT.

Been using Skype for a few years now. Used to work great. Got a little flaky in the last year. Then Skype 5 for Mac came out and it is terrible. But the old client kept working so I grumbled and kept using it. But this is just too much.

Need to move the family to something else. Mac and Win users. Recommendations?